Government Contractor Pays $742,500 to Settle False Claims Act Allegations in Obtaining Contracts Reserved for Eligible Small Businesses
ALEXANDRIA, Va. – CDM Smith Inc., headquartered in Boston, and CDM Federal Programs Corporation, located in Fairfax, have agreed to pay approximately $5.6 million to settle False Claims Act allegations and other civil claims related to inaccurate certified cost or pricing data submitted to the U.S. Navy.
The United States alleged that CDM Smith and CDM Federal submitted inaccurate cost and labor hour estimates and related certifications in connection with certain task orders on a federal contract to supply architect-engineering services to Navy bases. The alleged conduct would violate the Truth in Negotiations Act, which requires contractors who are negotiating certain government contracts to submit cost and pricing data to the federal government that is truthful, accurate, and complete.
The settlement resolves a lawsuit filed by a former CDM employee under the whistleblower provision of the False Claims Act. A whistleblower suit or qui tam action under the False Claims Act is commenced by an individual, known as a “relator,” filing a complaint under seal in the U.S. District Court, and providing a copy of the complaint and other evidence to the local U.S. Attorney. The United States then has an opportunity to investigate the claims. The False Claims Act provides the whistleblowers with a share of the government’s recovery.
The resolutions obtained in this matter were the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Virginia and the Naval Criminal Investigative Service.
This matter was investigated by Assistant U.S. Attorney Krista Anderson. The civil claims settled by this agreement are allegations only; there has been no determination of civil liability.
Related court documents and information from the civil lawsuit are on PACER by searching for Case No. 18-cv-01522.A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.
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